The statement is false. The practice of negotiating labor contracts is not known as a closed shop. It is collective bargaining agreement.
Step-by-step explanation:
A labor union contract is considered as the agreement of collective bargaining. The negotiation method for union contracts involves 2 committees, one which tells the interests of members of the union and the other that represents interests of the management.
Closed Shop needs employees to join a union prior to their employment and it requires employers to go to the labor union 1st for hiring new workers.
Collective bargaining is the negotiation method during the meetings between representatives and their employers, usually to enhance pay and conditions. The collective bargaining method permits employees to approach employers as a unified group.